Apple Inc. this fall plans to accelerate its assault on the 1 billion unit worldwide cell phone market with a second incarnation of its iPhone handset that will likely appeal to an even larger audience, AppleInsider has learned.

The move is believed to be part of a broader, all-out blitz on the consumer electronics sector this holiday shopping season, in which a staggering array of gadgets from the Cupertino-based firm is expected to leave would-be rivals confused and unable to react.

Extremely reputable sources have told AppleInsider in recent weeks that the company's iPhone roadmap for the 2007 calendar year includes not one but two distinct models, the second of which is set to turn up just months after the first.

According to one source, development of the second model has followed so closely on the heels of the inaugural iPhone that it was making its final pass through engineering around the same time that today's model hit the manufacturing lines back in May or early June.

Conceived as a scaled back, lower cost alternative to today's iPhone, the second iteration of the handset is presumed to marry iPod functionality with rudimentary cellular capabilities. More resource-heavy Internet browsing and e-mail capabilities are not expected of the device.

In providing the first visual descriptions of the handset, long-standing industry sources -- who've continually been in tune with Apple's future music directions -- have dubbed the device "an iPhone nano" because they say it best describes the the handset's overall form-factor and aesthetic.

Pricing of the new handset is expected to fall significantly below the $500+ asking cost of today's iPhone models, these sources say, but not so much so as to pinch sales of an upcoming revision to the iPod nano.

Like today's iPhone, the new model is expected to sport a revolutionary user interface, clues of which may have recently been revealed in a trio of patent filings.

The filings published earlier this month detailed telephone and text entry interfaces for a cellular-capable device via a virtual rotary click-wheel. One in particular described segmenting a click-wheel's circular shape into various regions to enable quick phone dialing by sensing which region was touched.

(The near-simultanious appearance of these filings, ensuing scuffle amongst Wall Street analyst over the prospect of an iPhone nano, and the notion that a corresponding device is actually flirting with manufacturing ramp, all appear to be part of an eerie coincidence at this time.)

In a move that would stand in stark contrast to the June 29th iPhone launch, where supplies were exclusive to Apple and AT&T stores, there's also some informed speculation amongst sources that the new model would be immediately available through a larger network of Apple third-party retailers and AT&T partners.

Further details will be published if and when information becomes available.

Apple announced the iPhone five months early so that the FCC wouldn't trump their announcement. I think that the final approval for the iPhone was at the beginning of June, so it really did take five months to approve. If iPhone "nano" will be released this year, there are only five months to work with. 2+2=... Still don't get it?

Apple announced the iPhone five months early so that the FCC wouldn't trump their announcement. I think that the final approval for the iPhone was at the beginning of June, so it really did take five months to approve. If iPhone "nano" will be released this year, there are only five months to work with. 2+2=... Still don't get it?

This "reputable" source is full of shit.

No, it doesn't take 5 months. It just appears that way based on when filings are actually published. Several iPhone approvals granted in May were not actually submitted until the second week of March. And please watch your language on these boards. We have many younger members.

The move is believed to be part of a broader, all-out blitz on the consumer electronics sector this holiday shopping season, in which a staggering array of gadgets from the Cupertino-based firm is expected to leave would-be rivals confused and unable to react.

Interesting... Are we talking updates to existing products (iPod/iPhone/ATV/etc.) or do they have something new up their collective sleeves?

I always knew that the rotary dialer was just too cool of a concept to die.

I wrote in this very forum last year that this would be the way to do it. People laughed at me and said I was crazy. Crazy like a Steve, I guess.

Unfortunately, this won't increase the iPhone market to include me. So long as it remains AT&T, I'm not getting one, period. Dammit, Apple, where's that stinkin' widescreen Video iPod with WiFi and Safari?

so if it's technically not the iPhone that was launched in June, do ALL future (within 5 yrs) Apple cell-phone based products remain under the evil empire of AT&T? Even if it's a smaller/cheaper grade of phone?

Before Christmas, we'll see:
- A cheap iPhone nano, say $100 more than the existing iPod Nano
- A price reduction of the iPhone (not much)
- A 3G iPhone
- A new iPod
- A new iPod Nano
- A new iMac design
- Launch in Europe ()
- Lots of happyness

Also, we might see new MacBook (Pro) designs at some point, probably not this year though.

Several iPhone approvals granted in May were not actually submitted until the second week of March.

I didn't even realise that the iPhone had "several" approvals to go through. Does this mean that some of the required approvals did take five months and some didn't? Seems to me that the so-called iPhone nano would have to go through the same process. Unless you're saying that Apple didn't submit the iPhone for FCC approval until March, I don't see your point.

But we'll see if this does turn out. And by your word, the approval process is at least 6 weeks long, so the likelihood is that we'll know fairly soon. I'm still not buying it.

You're a little late on this rumor. Reuters started circulating it on July 9. It's been pretty firmly quashed by now.

NEW YORK, July 9 (Reuters) - Apple Inc. (AAPL.O: Quote, Profile, Research) plans to launch a cheaper version of the iPhone in the fourth quarter that could be based on the ultra-slim iPod Nano music player, according to a JP Morgan report.

Not only would it be the dumbest marketing decision in the history of Apple (and there have been some doozies) because the new phone as described would be no more desirable than the failed Motorola RAZR, but recirculating these kinds of rumors just hurts Apple and helps Microsoft, Motorola, Nokia, Samsung, LG, Sony-Ericsson, Verizon, Sprint, et al. by engendering FUD among potential purchasers of iPhone.

Is that what you wanted to do? Aren't there plenty of Apple-positive rumors you could make up instead? Do you want to compete for hits with CNET, Computerworld, ZDNet, and all of the other Apple-negative sites?

in which a staggering array of gadgets from the Cupertino-based firm is expected to leave would-be rivals confused and unable to react.

But hopefully it's not a repeat of "shock and awe" -

This makes more sense then some other stories about this phone, except for the rotary thing which I think is a decoy. I can picture a wafer thin nano-like device with full screen display and iPhone like gestures. Minus the wifi maybe. But with iPod features like the current nano and perhaps video.

I like the really thin form factor of the nano and it's rounded edges. But I don't know how small a phone radio can be.

Finally, I'd say Apple competitors are already confused. They (the competition) just don't get it. They're like the American car makers who keep cranking out ugly bulky boring cars of yesteryear while the Europeans and Japanese and just about everyone else get more stylish and nimble. With Apple a lot of the magic is marketing. But they've also delivered goods that shame the rest.

1) I think this device sounds great. I really want a device for my Mom who can't really use a cell phone but who could benefit from syncing and keeps asking for an ipod. she would never want the iphone, but something smaller simpler that is phone + ipod would be great.

2) I think even the iPhone could be sold thru a much wider channel. the activation strategy really allows anyone to sell it, even give it as a gift...

3) I don't think loyal customers will be bothered much, most of them want the full function iphone anyway.

4) I hope it is not the UI shown in that patent, that seemed rather painful.

I don't know, I kinda already feel like the iPhone is an iPod with rudimentary phone features. It was the other features that sold me on the iPhone, but the phone part still feels a bit tacked on to me.

so if it's technically not the iPhone that was launched in June, do ALL future (within 5 yrs) Apple cell-phone based products remain under the evil empire of AT&T? Even if it's a smaller/cheaper grade of phone?

Why is AT&T an 'evil empire'?

the "new" AT&T is nothing but four original RBOCs (Soutwestern Bell, Pacific Bell, South Central Bell and Ameritech).

Many don't realize this, but Verizon was part of the "Evil Empire" once too. They were an RBOC (regional bell operating company).

The AT&T that you are referring to (the one that was broken up in 1984) died a slow an painful death. Its demise was final when SBC purchased it in 2003.

I don't think any one of the 4 major Wireless providers is necessarily bad or good. But to the point of Apple working with one of them, I doubt they would release a CDMA-based phone when 95% of the world is on GSM. So that leaves out Sprint and Verizon.

Apple would sell a TON of these. My kids would be all over getting a phone that would play their iTunes music, and eliminate their need to carry around two devices. They don't care about the extra internet access features, and a lower cost would make it much more attractive.

Get the cost closer to the cost for a video iPod and I think you would have a run away hit.

Better address the txt messaging issues first though (lack of MMS, no repeating alerts for missed messages, etc)...

I don't believe it. Taking features away from the current model may drop the price marketing wise sufficiently for the masses, however it would seriously reduce its apeal.

I go with them releasing an even better iPhone with video recording capabilities, a camera in the front with higher resolution, GPS, more software applications and the option of turning on a new G3 network chip. This at the same price as the current iPhone.

The current iPhone then becomes the iPhone of the masses at a $150 to $200 price drop.

Maybe my brain is twisted, but this sounds like a more likely approach to spark additional sales both at the high end and the low end.

I didn't even realise that the iPhone had "several" approvals to go through. Does this mean that some of the required approvals did take five months and some didn't? Seems to me that the so-called iPhone nano would have to go through the same process. Unless you're saying that Apple didn't submit the iPhone for FCC approval until March, I don't see your point.

The FCC also agrees to keep certain things private until the product is launched or about to be launched. There could be evaluation processes underway that have not been disclosed.

You're a little late on this rumor. Reuters started circulating it on July 9. It's been pretty firmly quashed by now.

NEW YORK, July 9 (Reuters) - Apple Inc. (AAPL.O: Quote, Profile, Research) plans to launch a cheaper version of the iPhone in the fourth quarter that could be based on the ultra-slim iPod Nano music player, according to a JP Morgan report.

It has neither been confirmed nor quashed. A JP Morgan overseas analyst made the prediction; JP Morgan US HQ said they did not agree. Because of JP Morgan's overall reputation, even the ramblings of a rogue analyst have been taken seriously and widely reported. More reported, actually, than the subsequent retraction from HQ.